When a Relative Dies and You Can’t Afford the Funeral

When Apple co-founder Steve Jobs passed away this month, he left behind a huge legacy — and a huge financial fortune too. Since Jobs was one of the richest men in America, his family undoubtedly had no problem paying for his funeral and putting Jobs to rest.

Unfortunately, that’s not the case with many other Americans. It’s a sad reality that many families and individuals have to deal with, but the truth is that when many people pass away, their family members or close friends struggle to afford the funeral.

Knowing what to do when you can’t afford to bury a relative can help to relieve some of the stress and heartache of this difficult time.

According to the National Funeral Directors Association, the national average cost of a funeral with a vault was $7,775 in 2010. The cost of a burial without the casket was about $4,265 that same year. For many grieving families, paying thousands of dollars to bury a relative just isn’t economically feasible.

If a loved one passes away and the burial and funeral costs are out of your budget, here’s what you need to do:

Analyze the individual’s life insurance policy

Determine whether some or all of the burial and funeral costs are covered under the deceased’s life insurance policy. Talk to an agent in person or over the phone to go over all of the details, limitations and stipulations associated with the policy so that you understand what is and isn’t covered. You may find that a good percentage of the funeral costs are already covered based on life insurance the individual had on the job or a life insurance policy they bought on their own.

Review low-cost burial options

Cremating someone is usually less expensive than burying the individual in a casket or vault. If your state doesn’t require embalming the body, consider a “green burialâ€ where you don’t have to pay for a vault, headstone or expensive caskets. You can also shop around to find an affordable casket online.

Consider getting a loan

If you have good credit and are comfortable with taking on a personal loan, consider applying for financing from a local bank or credit union in order to pay for the burial. Avoid taking out a cash advance on a credit card because you’ll be responsible for paying very high interest charges and could end up carrying that debt for several months, even years.

Ask other family members to chip in

You may not have to shoulder the responsibility of paying for the burial all by yourself. Consider asking family members to pitch in and help with the costs. Be specific and candid with relatives about how much the funeral costs; ask everyone involved how much they can reasonably contribute; and put together a cost sheet or budget to help you keep track of all of expenses.

Talk to your county coroner’s office

If you simply can’t come up with the money to pay for cremation or burial costs, you can sign a release form with your county coroner’s office that says you can’t afford to bury the family member. If you sign the release, the county and state will pitch in to either bury or cremate the body. The county may also offer you the option to claim the ashes for a fee. But if these also go unclaimed, they will bury the ashes in a common grave alongside other unclaimed ashes.

Obviously, when a person dies it’s a terribly emotional time for that individual’s family members and friends. But it needn’t cause financial turmoil too.

You can do yourself and those you care about a favor by planning ahead and making sure you at least set aside money or have enough life insurance to cover your own burial costs in the event of your unexpected death.

“Ask The Money Coachâ€ is a syndicated column written by personal finance expert Lynnette Khalfani-Cox, co-founder of the free financial advice blog, AskTheMoneyCoach.com. Follow Lynnette on Twitter at @themoneycoach.